Making the UK’s National Security and Investment (NSI) regime “more business friendly”

Responding to a consultation it launched in November 2023, the UK Government plans to make the UK’s investment screening regime “more business friendly” by:

• Creating an exemption from the mandatory notification requirement for the appointment of liquidators, official receivers and special administrators (expected Autumn 2024).
• Considering whether it is feasible to introduce targeted exemptions for intra-group reorganisations (where the beneficial owners stay the same), Scots law pledges and transactions involving public bodies.
• Formally consulting (by Summer 2024) on revised definitions for the 17 specified sensitive areas of the UK economy that trigger mandatory notification requirements. This will include proposals for standalone semiconductor and critical minerals sectors (which are both currently sub-categories of other sectors) and the addition of a “water” sector to the list.
• Updating existing guidance, and publishing new market guidance, to improve understanding of when the Government may intervene in a transaction and why. Particularly focusing on factors the Investment Security Unit will consider when exercising the power to call in transactions, and how the NSI regime specifically applies to academia/research and outward direct investment.
• Improving operating systems and processes administered by the Investment Security Unit.

The Government is not planning to introduce a specific exemption for commercial arrangements allowing a transfer of voting rights to a lender in the event of a loan default.

It also does not intend to introduce a fast track clearance procedure, which was requested in responses to the consultation, for certain investors and transactions.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at April 2024. Specific advice should be sought for specific cases. For more information see our terms & conditions.